On Friday, significant data was released.
The U.S. non-farm payrolls increased by 311,000 in February, with an estimate of an increase of 225,000, and the previous value was an increase of 517,000. The average hourly earnings in the U.S. in February grew by 4.6% year-on-year, with an estimated growth of 4.7%. The U.S. unemployment rate in February was 3.6%, with an estimate of 3.4%, and the previous value was 3.4%. The market is quite concerned about the average hourly wage growth rate, which is 4.6% (expected 4.7%).
After the data was announced, the U.S. dollar index fell, and the market sentiment for a 50 basis point rate hike in March significantly contracted. It can be said that this is a good data for everyone.
Those who are worried about a recession saw such a good non-farm employment data and their concerns about an economic downturn significantly decreased. Those who are worried about the Federal Reserve's aggressive rate hikes saw the unemployment rate rise, and the rebound in wages was also less than expected, indicating that future inflation may decrease as expected, and the market's concerns about rate hikes exceeding expectations have decreased.
Therefore, after the data was released, the market was in a state of jubilation, and the market sentiment that had been suppressed for more than a week by the hawkish stance of the Federal Reserve Chairman was immediately released, and U.S. stock futures rebounded. However, the performance of U.S. stocks after the opening was average, and they went straight down after the opening, with repeated ups and downs. The big rebound that the market was looking forward to did not happen as of the time of writing.
Obviously, the market has started to partially trade on a recession.
However, for A-shares, it may be a good thing. The A50 has risen, the renminbi has appreciated, and the commodity market has also risen.
Looking back, the market adjustment since February has been consistent with the basic trend of the depreciation of the renminbi. When the renminbi appreciates, stocks rise; when the renminbi depreciates, stocks fall.
The dollar depreciates, and U.S. stocks are not good, where does the money go?
Looking around the world, it seems that only the big A has this allure. Europe is in a recession, emerging markets are experiencing a dollar shortage, and only China, relying on the $2 trillion trade surplus accumulated during the pandemic, is stimulating the economy with low interest rates. There is only one place in the world like this, take it or leave it~In fact, recently, although the A-share market has been declining, the domestic economic fundamentals have been strengthening.
On the policy front, various policies have been introduced one after another, including expanding domestic demand and the digital economy, etc.;
On the monetary front, the M2 growth rate for February announced today is 12.9%, reaching a new high, and monetary policy continues to be loose;
Looking at some leading indicators:
The PMI continues to move towards the expansion range, and the prices of goods, especially industrial products, have been rising recently, reflecting that industrial demand is recovering.
In addition, the data released by Shenzhen Airport on Friday shows that the passenger throughput in February was 3.7939 million people, a year-on-year increase of 101.85%; the cumulative passenger throughput for the year was 7.3645 million people, a year-on-year increase of 94.09%, which has returned to the level of 2019. I have also been frequently checking the air ticket prices in various places recently and found that the ticket prices have also recovered quite well, and the usual traffic and crowds are very full.
All signs indicate that, with the possibility of the yuan entering an appreciation range, the domestic economy is moving from a weak reality to a strong reality, and the verification of expectations will become the main line of the market in the next 1-2 months.
Some people may worry about the rise in the U.S. unemployment rate and whether it will have an impact on external demand, as well as whether the U.S. CPI data next week will have an impact. I think the short-term problem is not big, the east wind is very strong, and the west wind is still far away.
1) In March, the construction ramp-up period officially began, domestic data will look better one after another, and the domestic east wind will blow stronger;
2) Last February, U.S. inflation soared from 7.9% to 8.5%, directly increasing by 0.6 percentage points, so the base in February was relatively high, which is favorable for the inflation data in February. Moreover, the rise in the unemployment rate and the wage growth rate not meeting expectations still have some restraining effect on inflation. In January, it was 6.5%, and the inflation pressure in the United States in February may not be that great.3) The increase in the unemployment rate is relatively small, and with the help of unemployment benefits, the short-term impact on external demand may be limited.
Therefore, the current situation is that the east wind is overwhelming the west wind. With the expectation of the Federal Reserve's interest rate hikes slowing down and the appreciation of the yuan, it is estimated that the A-share market is likely to start a new round of trading.
Don't linger in the battle; after raising the price, remember to sell!
Investing does not require being in the market for the entire time. After selling, wait for a good price.
Some people worry, what if the United States has a soft landing, wouldn't that mean missing a good opportunity? Money is not much use; what we need to focus on is the changes in real assets. Just ask who is willing to be the sucker to continue borrowing at low interest rates after the United States has spent so much during the three years of the pandemic.
Bullish investors go long, and bearish investors go short.
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